Alibaba and Beijing step up anti-counterfeiting drive

E-commerce giant gets help from five law enforcement agencies in new push to root out counterfeiting and intellectual property rights violation

Alibaba Group, the mainland's largest e-commerce services provider, is tightening its focus on eliminating counterfeit merchandise across its online trading platforms with the help of five key government and law enforcement agencies.

The company announced yesterday a partnership with the Ministry of Public Security, the State Administration for Industry and Commerce, the General Administration of Quality Supervision, the State Intellectual Property Office and the General Administration of Press and Publication to root out counterfeiting and intellectual property rights infringement.

Jack Ma Yun, the chairman and chief executive of Alibaba, at a conference in Hangzhou, described the mainland's counterfeiting issue as "a spreading toxic cancer that must be dealt with".

Ma also called counterfeiting syndicates as "the mafia in our society", responsible for "curbing innovation and creating a false prosperity" in the economy.

Alibaba's new Beijing-backed initiative will support the company's online system for identifying, confirming and taking down counterfeit product information on its platforms and penalising merchants caught violating intellectual property rights.

The five government agencies are expected to join forces offline to track and locate the identified sources of counterfeit goods and shut down these operations.

Alibaba's trading websites had previously come under fire for the proliferation of counterfeit products. Taobao Marketplace, which hosts thousands of online merchants, was once flagged by the Office of the US Trade Representative as one of the world's most "notorious markets" for pirated goods.

Polo Shao Xiaofeng, the chief risk officer at Alibaba, pointed out that the new initiative had nothing to do with the speculation about the company going for an initial public offering this year.

Efforts by Alibaba against counterfeiters have increased recently. Last year, the company provided information involving 72 brands to law enforcement authorities that resulted in the arrest of 324 suspects from 43 counterfeiting rings. The amount of merchandise involved in these cases totalled 170 million yuan (HK$213.6 million).

These efforts will continue under Jonathan Lu Zhaoxi, who will take over as Alibaba's chief executive on May 10. Lu, who currently serves as the company's chief data officer, will chair a special "IPR protection and anti-counterfeiting" task force to push forward that agenda with the support of the five government agencies.

JP Morgan has forecast the gross merchandise value of the mainland's online shopping market in 2015 will reach US$436 billion, accounting for 8.5 per cent of the country's retail sales.